Starbucks Corporation
🇺🇸 SBUX · NYSE/NASDAQ · US8552441094
Consumer
USD 90.37 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
75.3
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 90.37 ÷ 1.20 = 75.3
TTM period through: 2025-12-31
Forward P/E (estimated): 39.1
Based on analyst estimates
Reference: Provider P/E (Trailing): 75.3
Yield (Fwd)
2.74%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.72%
Net Debt/EBITDA (TTM)
5.7x
Latest quarter: 22.1x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 22.1x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
206.6%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 203.4%
Cash Flow Payout (TTM): 65.2%
FCF Coverage (TTM): 0.84x
EV/EBITDA
27.3x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Starbucks is a premier global coffee brand currently attempting a major operational turnaround, but its financial profile makes it unsuitable for conservative dividend strategies. With extreme valuation multiples, declining long-term earnings, elevated debt, and a dividend currently uncovered by free cash flow, the risks heavily outweigh the potential returns. The stock is not recommended for new positions.
Sector Context
Starbucks is a leading global roaster, marketer, and retailer of specialty coffee, operating both company-owned and licensed stores. While consumer food and beverage companies can offer stable cash flows, restaurant and coffee chains are highly exposed to discretionary consumer spending, wage inflation, and commodity costs, requiring strong balance sheets to maintain reliable dividends during economic uncertainties.
📊 Strategy Analysis
- • Maintains global brand dominance with a strong historical track record of long-term revenue growth (+5.7% 10-year CAGR).
- • New leadership is actively implementing a turnaround strategy, including incentive programs and store optimizations, to address operational inefficiencies.
⚠ What to Watch
- • Extreme valuation with a TTM P/E of 75.28 and Forward P/E of 39.06, entirely detached from the strategy's 8-15x target range.
- • Dividend sustainability is severely compromised, with free cash flow failing to cover the payout (0.84x coverage) and a TTM payout ratio of 123.6%.
- • Deteriorating financial health characterized by a 5-year EPS decline (-14.4% CAGR), net margins contracting to 5.0%, and elevated Net Debt/EBITDA of 5.74x.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.